Poundcake Company owns 10,000 shares (10% of total shares) of Joshua, Inc. Joshua declares and pays a cash dividend of $0.50 per share. Poundcake first records dividends when cash is received. Upon receipt of the cash dividend, what entry should Poundcake make?

Question

Phoebe Henry

Business

13 June, 09:49

Poundcake Company owns 10,000 shares (10% of total shares) of Joshua, Inc. Joshua declares and pays a cash dividend of $0.50 per share. Poundcake first records dividends when cash is received. Upon receipt of the cash dividend, what entry should Poundcake make?

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Johan Gentry · Answer 1

Journal Entries

On declaration of dividend

Dividend Receivable (10000*.5) 5000

Dividend Income 5000

To record the Dividend Income on declaration date

On dividend Receipt Date

Cash 5000

Dividend Receivable 5000

To record the receipt Dividend in ledgers.